Indian exports of fabrics and made-ups are finding it difficult to survive in international markets both in terms of prices and quality. Though cotton mills are allowed to import any quantity of cotton on OGL, this facility seems to have failed to yield results on the export front. The average price realisation in respect of cottonfabrics in the first five months of the current year has been lower at $0.49 per square metre compared with $0.52 in the same period of the earlier year.

The markets in quota countries are particularly bad, though dispatches to non-quota countries have been better. Though cotton yarn and thread exports appear to be better by 11.69 per cent in value terms in the first five months of the current year at $658.69 million compared with $589.77 million in the same period of the earlier year, export trade circles are not happy about this.

According to them, shipments have lately slowed down and price realisations have also worsened. In this context they point out that shipments of cotton yarn, which had reached 50.86 million kg in July 1999, declined by almost 11 per cent in the following month to 45.25 million kg. In value terms the fall was sharper around 15.60 per cent at $121.88 million against $144.42 million in the earlier month.

That apart, quota markets in Europe in particular, are in a bad shape. Thisleads to doubts whether the tempo of cotton yarn exports will be sustained in the remaining months of the current year. The average price realisations in August have fallen to $2.69 per kg from $2.83 per kg in the earlier month. Certain counts do not fetch even such reduced average prices. Mills are being forced to sell even at unremunerative prices in order to just remain in production.

So far as European markets are concerned it was earlier hoped that after August-holidays,things might improve there and demand might pick up, but these hopes have failed to materialse. The main reason for this is that the European economy has slowed down. Even European spinners have been affected by economic slow down.

The US market is no doubt strong, but due to quota restrictions it is not possible to push up shipments to that market. Meanwhile, China, which used to be major importer of cotton has now emerged as its exporter and started offering its cotton to neighbouring countries. Unlike India China is reported tohave abolished restrictions both on imports and exports of cotton.